Renewable energy such as solar electric and wind power are best generated in a disperse manner, and not at central locations. Furthermore, technology has advanced to the point that most anyone can generate renewable energy at their home or nearby locations and use on site. Such local use would be greatly facilitated by sharing, wherein generated power in a neighborhood were used in a cooperative manner such that excess power not needed at one site could be pooled and used by others in the area.
Local grids solve many problems, such as inefficiency of energy transmission, greater resiliency, relative freedom from government interference and freedom from racketeers, who spend money on favorable regulations to control government and utilities for financial advantage at the expense of a vibrant middle class.
Despite these attributes, the perceived cost and complexity of local grids are very high. As a result, it is expected that individuals will become subservient to utilities even to use their own locally produced power. For example The Economist magazine p. 66 October 18-26 issue of 2014 states: “[b]ringing microgrids to the masses is harder. Capital costs are high. So some utilities . . . now want to provide customers with microgrids as a service.” In fact, the freedom available from locally produced energy is in doubt since the large utilities want to control locally produced and consumed electricity. As stated in the Economist: “[b]ig Maryland utilities such as Pepco and Baltimore Gas and Electric are showing interest. The last thing they want is other operators grabbing revenues the utilities view as theirs by regulatory right. They also smell higher profits . . . .” In order to exploit local grids, such outsiders follow rentier profit seeking models taught in business school to maximize their return on investment by owning and controlling power networks used by others.
Another problem is that power grid loads are not controlled by power generation capacity, but oppositely by power demand. Expensive real-time top down monitoring and control systems are required to monitor and predict power use and then to throttle power plant output (typically by changing rate of fossil fuel burning), in response to that demand. The business school model of seeking rentier profits by owning and ladling out resources to captive consumers conflicts with the reality that much power can be produced and consumed locally and that there is no practical upper limit to how power an energy user could consume, if that power were available.
Because of the rent seeking power market model and centralized ownership and control based on accumulation of fiat wealth, existing grids require “large and complex hardware-software systems . . . for real-time operations and control” (see: State estimation and contingency analysis of the power grid in a cyber-adversarial environment published at http://csrc.nist.gov/news_events/cps-workshop/slides/presentation-9_berthier-bobba-davis-rogers-zonouz.pdf). Accordingly as described therein present grids require “continuous monitoring and analysis” at a central location and “hierarchical control architecture.” Such fragility incurs further expenses in defending from hackers and legal expenses over ownership contests by far away bankers who have no understanding, personal interest or stake in energy generated and used at the local level. Accordingly, making a grid simple, self-regulating, cheap and very efficient would provide immense benefits, not only in making more energy available to users, but in lowering infrastructure costs and resistance to cyber attacks from outsiders.